Business Sustainability Strategy in a Cooperative Kibbutz Industry

Abstract

This article describes the management approach underlying the strategic business sustainability at a kibbutz factory situated in a non-privatized collective community. The business strategy explains the outstanding success of “T Industries”—which ranks as a leading kibbutz enterprise. The research utilized qualitative methods, using deep interviews combined with document analysis. The study found that the strategic management of T Industries comprises three major components: (1) socialist concern for community wellbeing, (2) an external strategy that focuses on expansion and rendering the industry global, with numerous organizational alliances and acquisitions, and (3) an internal strategy that includes self-criticism, professionalism, creativity, and organizational learning. Strategies of the top management have the ability to integrate conflicting methods into their strategy while promoting innovation and originality and can increase economic success and reassure its sustainability for the business and the community.

1. Introduction

This article describes the management approach underlying the strategic business model at a kibbutz factory situated in a non-privatized collective community. The goal of the study is to understand the remarkable success of “T Industries” (a pseudonym, which the initials “TI” will represent) and to examine whether its business strategy is the reason for becoming one of the leading kibbutz industries. The research is a case study examining a variety of business strategies that have enriched that factory and the cooperative community that owns the enterprise. Specifically, this research examines the impact of the communal aspect of TI’s business strategy and how this component has contributed to the sustainability of the enterprise.

A business strategy constructed from communal, internal, and external narratives promoted the business sustainability of TI. To analyze and understand the TI case study, the researcher established a theoretical approach, comprising three sources of frameworks:

(1)

Communal strategies that flow from cooperatives literature [1,2,3,4], kibbutz community literature, and kibbutz industry literature [5,6,7,8,9].

(2)

Business strategy aimed at internal organizational systems that improves and enhances operational abilities [10,11,12,13,14,15,16].

(3)

External business strategy that works to strengthen environmental relationships [17,18,19].

Business strategy and sustainability have strong interdependence and interaction; corporations are committed to addressing sustainability through their organizational strategy [20]. This research addresses the moral and ethical concerns of TI, including long–term sustainability, that have assimilated into its business strategy [21]. Previously, research literature has not invested much effort in examining these concerns in business affairs. The current research explores the effect of the owners’ communal lifestyle on business strategy. In the case of TI, the managerial commitment to that lifestyle explains, in part, its business success and sustainability [7]. Another contribution of the current research is the exploration of strategic business models in kibbutz industries, a topic generally ignored in previous literature. Kibbutz industry has special attributes [5,6,7,8,9], which demand analysis together with relevant business sustainability strategy models. This would enhance current literature by providing an eclectic theoretical lens for strategy model research. Moreover, this study sheds light on how to execute business strategies that ensure sustainability in kibbutz industry and other businesses.

TI’s business strategy is multifaceted in terms of its external, internal, and cooperative features. The enterprise has responded to dynamic external environments by initiating alliances and participatory relationships with other organizations that promote a friendly environment for TI. At the same time, internal factors include numerous organizational changes—which the management has implemented—to create a dynamic and innovative organization. The experience at TI reinforces the literature that claims that business sustainability requires innovation [22,23,24,25]. Moreover, despite the complex nature of TI’s experience, the findings of this case study may supply practical implementation procedures to other businesses, demonstrating how a set of particular strategies contributes to a firm’s sustainability [10,12,15,16].

Due to the paucity of research about business strategy in kibbutz industry [7], this case study is innovative, because it examines a cooperative kibbutz industry—as opposed to privatized kibbutz industries. This research examines the key factors of the business strategy that contributes to TI’s economic success and sustainability. Being a cooperative industry, it established its business strategy with a communal ethos that motivated managers, workers, and community members to achieve business sustainability for the long run. Although its managerial policy often adjusted to the competitive environment—using heterogeneous strategies—TI maintained its special DNA as a cooperative enterprise. Consequently, the current research concludes that maintaining traditional cooperative kibbutz features can be a powerful force for business strategy and business sustainability. These features have managers and workers utilizing teamwork, egalitarian relationships, as well as open and informal relationships. Nevertheless, a cooperative strategy alone is not enough for business sustainability. The current research claims that a diversified business strategy—with strong relationships with its local and global environment alongside internal organizational improvement—is necessary to complement its cooperative characteristics to ensure stability and sustainability.

Previously, the literature about kibbutz dealt with the issue of community sustainability in terms of transferring the kibbutz lifestyle and legacy from the founders to subsequent generations [26]. This transfer faced a major challenge in the 1980s and 1990s when the kibbutz movement needed to adjust to turbulent capitalist environments after the 1977 electoral loss of the Labor Party, which had protected the kibbutz movement for decades [2,7]. As a result, the kibbutz movement suffered an existential economic crisis and demographic decline. To cope with these intertwined crises, most kibbutzim underwent a severe process of privatization [27] and re-invented themselves as “renewed kibbutzim” [28]. Privatization also effected the kibbutzim’s economic enterprises [7,29,30]. Most of the existing literature after the 1990s has dealt with industries in privatized kibbutzim, but there has been a dearth of research about cooperative industries in traditional kibbutzim. Moreover, the topics in the existing studies have dealt with issues of the transition from democratic to hierarchic structures, cultural issues, and coping with economic crisis [31,32], but have usually not focused on business strategy in kibbutz industry [7]. In the same way, most research about cooperatives in other countries have ignored the issue of business sustainability strategy [1,2,3,4,33,34,35,36,37,38]. To fill this theoretical gap, the current research deals with the business strategy of a cooperative industry belonging to a cooperative community. The research questions are: What is the business sustainability strategy of a specific cooperative industry (i.e., TI)? How does the communal narrative shape its business sustainability strategy?

2. Literature Review

2.1. Background on Kibbutz Movement

Starting in 1905, young Jewish pioneers began immigrating to Turkish Palestine (later British Palestine), hoping to establish a socialist entity after experiencing the failure and shortcomings of various revolts and revolutions in Russia [34]. Kibbutz ideas wanted to establish equal entity, that take care on the wellbeing of its communal members [26,27,28,29]. Their efforts and the efforts of subsequent immigrants with similar goals led to the establishment of communal villages and eventually the kibbutz movement [27,28]. The pioneers believed in communal egalitarian principles; they work cooperatively, without competitive material gain or long-term personal positions of power and prestige.

Kibbutzim have mutual social and economic features similar to cooperatives outside of Israel (e.g., in Italy, Spain, Canada Brazil, India, The United States). They all use democratic and egalitarian methods to care for the wellbeing of their residents [2,3,4]. Working environments are more open and friendly than in capitalist communities. Agricultural cooperatives attain sustainability by working on a voluntary basis, according to which their members achieve social goals through democratic self-management [38]. Moreover, the cooperatives’ economic success is evidence that profitable business can exist in a more just and equal system than capitalism [32,33,34,35,36,37,38].

The kibbutz movement participated in the formation of a new Jewish society and the foundation of the State of Israel by establishing new kibbutzim and sharing in the creation of various national institutions [26]. The kibbutz movement enjoyed the support of the ruling Labor Party until 1977. After the right-wing Likud Party won the elections of 1977, the government drastically decreased its economic support to the kibbutzim during a period of rampant inflation. At the same time, most kibbutzim were not adjusting fast enough to the neo-liberal surroundings to avoid crisis [28,29]. As a result, many of their economic enterprises collapsed [7,39,40,41].

This led to an economic crisis in the entire kibbutz movement in the 1980s, with a subsequent decline in both membership and organizational stability [6,8,42,43]. To cope with this economic crisis and organizational decline, the kibbutz movement adopted a process of “privatization” to help its sustainability. More than 75% of its communities have undergone that process [6,30,31,32,33,34,35,36,37,38,39,40,41]. The process of privatization fundamentally changed the kibbutz lifestyle in the “renewed” communities [43]. These kibbutzim still felt a responsibility to their residents, but at a much lower level [28,29]. Contrary to the total cradle-to-grave social services originally provided by the kibbutzim, “renewed” kibbutzim widely varied in the amount of support and social services they offered, relying on the members to be more independent than previously [30,31,32,33,34].

Primarily according to their seniority, members received ownership shares in previously communally owned properties. Instead of the previous egalitarian “personal budgets”, members received salaries and wages according to external market evaluation. The kibbutzim allowed—even encouraged—increasing numbers of members to find relatively lucrative jobs outside the community, resulting in hiring outsiders to fill job vacancies in the kibbutzim. The kibbutz continued to provide some subsidized services (e.g., education and health), but turned other services into pay–for–use benefits (e.g., laundry and swimming pool). Thus, the individual members had greater freedom to choose their lifestyle, but at the expense of the community as a socio-economic unit. This process of privatization also caused changes in kibbutz industry [8,9,30,31,32,33,34].

2.2. Communal (Kibbutz) Business Sustainability Strategy

In the past, kibbutz industry had had an egalitarian communal style of operation [5,6,39]. The factory supplied work for kibbutz members and offered an informal atmosphere for co-owners to work in, under the direction of elected member–managers. The kibbutz’s Economic Committee and General Assembly (i.e., all the members, with equal voting rights) made the major decisions for the factory—usually at the request of its managers. With privatization, the kibbutzim organizationally and legally separated their economic enterprises from the direct control of the owner-community. The factory gained autonomy in regard to recruitment and development. The management began hiring employees from the outside—especially low cost blue-collar workers—who came from the nearby towns and villages [30,31], and also professional workers with personal contracts. Thus, the factories’ organizational culture soon became hierarchical and bureaucratic [30]. For most privatized factories, kibbutzim established a board of directors, which represented the indirect control of the owner-community, but whose major interest was profitability. Top management made all the operational decisions in a centralized process, which was a far cry from the previous democratic and egalitarian decision making [8].

In recent years, kibbutz industry has trifurcated. Most kibbutz factories abandoned their original social goals—which had often overridden economic considerations—and focused on capitalist efficiency and profit in the competitive external environment. Some of these factories had suffered from financial crisis, stagnation, and decline, and subsequently lost their communal nature [8,30]. The managerial style in these factories had changed over the years—from communal in their early years to bureaucratic and formal after privatization [21]. Many of the kibbutzim eventually sold these factories to private investors [7]. Nevertheless, some kibbutz industries kept their communal features, although their kibbutz-owners had privatized. The kibbutz community continued to be involved in managing the industry and the factory maintained its democratic and egalitarian relationships [31,33]. Recent research indicated that these kibbutz factories had familial–business features that expressed mutual concern for the wellbeing of community members. The relationships in these factories resembled homely kinship bonds [44,45]. Still other kibbutz factories evolved into cooperative style businesses [31]—which combined communal and neo–liberal attitudes in their managerial behavior. This recent change and adaptation can ensure the kibbutz industry continuity and sustainability [7,8].

2.3. Business Strategy and Sustainability

The business strategy of a firm is its master plan for commercial activities. This consists of its objectives as well as the procedures and guidelines to reach those objectives. Business strategy presents a theoretical scheme for understanding the enterprises’ activities and its responses to external factors and internal operations, which can ensure its sustainability. The central concern of every board of directors is pondering its firm’s business strategy and overseeing the management’s adherence to the strategic plan [46,47]. It presents managers with various options for participating in relevant markets (local, national, or international) and the underlying beliefs of those options [48,49]. For academics, examining a business strategy uncovers typologies and behaviors that provide fruitful specific and comparative research [14,50,51].

2.3.1. Internal Organizational Business Strategy

Managerial strategy sets out the arrangement and nature of organizational learning—which both initiates and reacts to innovation—allowing the adoption of technological enhancements while running daily business [13,21,22,23,24,52,53,54]. Even small adaptations in technology and organizational procedures can decrease operating expenses and enhance a firm’s capability to compete [55]. Innovation can be accomplished by adopting networked information-driven technology by building Internet-based artificial intelligence data systems—which will enhance the assimilation of information [10,15,56,57] and enable analysis of big data. This will provide smart management systems [16] that improve organizational innovation, communications, and production procedures [11]. Incremental innovation seems to be better than radical change. A successful firm gradually adopts innovation, training its employees to adapt to the changes [58].

A business strategy guides a multifaceted investigation of a firm’s worth, including future development, profitability, and potential dangers. It details the need for suitable relationships to execute commercial procedures and how to attain and maintain the approval of clients and other stakeholders [59,60]. All these managerial strategies will enhance the enterprise’s sustainability and the cognitive skills among managers and their employees [12]. Moreover, business strategies encompass criteria for planning, regulation, transfer of information, preparation of employees, styles of communication, and skills for dealing with people both inside and outside the organization [53,55]. It can also guide administrators towards resolving issues, finding imaginative solutions, understanding complex systems, and developing competence in quantitative analysis, logical thinking, and diagnostic design [61,62,63,64]. Sustainability strategy can even create more honest and ethical behavior, because sustainability encourages the firm’s managers to act according to their promises to the shareholders and stakeholders—thus reassuring the shareholders and stakeholders of the value of their investment in the firm [13,18,19,21,47,59]. Both shareholders and stakeholders expect management strategy to be transparent about business profits and performance [61].

2.3.2. External (Environmental) Business Sustainability Strategy

Managerial strategy strives to establish friendly external environments for its business. This includes its basic assumptions, its market tactics, its methods of exchanging information externally and internally, as well as its environmental legitimacy [7,62]. Most research about business sustainability strategy focuses on the perspective of materials [47,55,63,64]. Social and economic issues, networking with other global companies, and environmental interests complicate material sustainability—which in turn effects business flexibility and achievements. One aspect of this flexibility is building dynamic organizational structures that can cope with the demands of customers and the environment [65,66,67,68]. Business sustainability strategy adopts flatter structures in dynamic and turbulent surroundings—which can respond quickly to environmental changes [69,70,71]. This was the case of a Brazilian community that established economic and environmental benefits for agriculture products. It enhanced its business sustainability and environmental legitimacy in the eyes of Brazilian society [17].

The managerial attitude is crucial in a business model, because it determines how the organization responds to environmental threats. Administrators must be flexible and respond to dynamic commercial environments by appraising potential dangers and planning for an unpredictable future [18,19]. The long-range maintenance of a business model is an on-going challenge that obligates administrators to delineate organizational strategy, design and evaluate models, determine crucial achievement benchmarks, and create responses to potential environmental threats [66,67]. The desire for business sustainability molds business strategy to improve organizational competitiveness in the global market [25,68]. To accomplish sustainability, organizational policy needs to anticipate future developments in order to estimate changes in the environment, including global factors. This is possible by maintaining a clear vision about adjusting the organization for the long run [58]—including the consideration of business risks that the management needs for better compatibility with local and global demands [62,66,68]. The issue of business risk is crucial for clients and other actors that must understand the firm’s business model in order to successfully interact with it [18,19].

Business sustainability strategy requires adoption of international quality standards [69,70]. This was the case in a kibbutz industry—manufacturing low‒tech agriculture products—which wisely adopted American and European quality standards [33]. This strategy allowed that enterprise to enter new markets, increase its capacity to compete, and cope with environmental uncertainty [7]. Enhancing organizational performance and striving for excellence facilitated the adoption of these international quality standards [23].

Organizations are seeking better rapport with their environment by encouraging friendly relations with local groups. Wise policy and prudent decision making—which consider social responsibility towards the citizens—can accomplish this goal. For example, offering fair prices and receiving moderate profits improves a firm’s public image [71]. Another productive activity is responding to environmental and ecological conditions—which has become very important in recent years. Business needs to combine commercial goals with clean and safe ecological principles. This has become a demand from government authorities as well as from citizens [71]. A “green” policy can lead to better business opportunities, discovering new markets, and expanding products lines [17,25]. Schaper [72] mentioned this as one of “numerous niches that enterprising individuals and firms can successfully identify among other things, the development of new products and services new methods of marketing”.

3. Method

This research adopted the case‒study approach [73]. The analysis presented in the current work represents an entrepreneurial biography that describes the development of the organizational sustainability of a particular firm from 2000 to 2020 [74]. Case-study design is a qualitative method, in which the researchers become the main instrument of the study, identifying the special features of the phenomenon. Corbin and Strauss called the case-study method a “fundamental analytic process used by the researcher” [75]. This work is a case study because the research deals with one organization, describing one complex case—the features of its business strategy—focusing on the special conditions that molded this phenomenon. It also describes the construction of reality and dynamic processes arising from the interviewees’ stories about daily life [76]. The case-study method features in management operation studies when an author wants to develop a new theory.

Case-study research can focus on numerous social events, organizations, community groups, and so on [77]. Organizations and communities with different demographic features that have anthropological and cultural narratives are suited to inductive qualitative methods—like the case-study method [78]. The case-study method can provide deeper analysis by focusing on sociological or anthropological phenomena.

The case-study method acts as a tool to interpret TI’s values from the reflective and critical approaches in managerial studies. The field of managerial studies is relatively young. Thus, research in managerial studies is often different, because it lacks research and needs to collect the data from the field by identifying a specific policy or a distinguishing managerial strategy [79]. The current case study is particularly relevant for examining TI, because the researcher heard ontological concepts from subjective perspectives and had to deal with the issue of how each interviewee grasped the reality, the strategy, or the policy of TI [80,81,82,83,84,85,86,87].

3.1. Data Collection

The data collection to determine the strategic management model of TI consisted of 27 deep interviews and document analysis [88]. The interviewees and booklets published by the company described various business strategies that were implemented from the foundation of the firm to 2016 [87,88].

3.1.1. Interviews

During the interview, the interviewee and researcher engaged in a free-flowing discussion as would occur in a normal discussion(

Table 1. The Interviewees [88,89].

Position	Duration of Interview	Seniority	Gender	Status in Kibbutz
Current CEO	One hour	35 years	Male	Member
Former CEO	One hour	32 years	Male	Member
Former CEO	One hour	30 years	Male	Member
Vice president	One hour	25 years	Male	Member
Marketing manager	One hour	15 years	Male	Member
Purchasing manager	One hour	15 years	Male	Member
Quality manager	One hour	10 years	Male	Outsider
Houseware manager	One hour	20 years	Female	Member
Information manager	One hour	5 years	Male	Outsider
Human resource manager	One hour	15 years	Female	Member
Former human resource manager	One hour	20 years	Female	Member
Quality worker	One hour	5 years	Male	Outsider
Quality engineer	One hour	2 years	Male	Outsider
Three temporary workers	Half an hour	3 month	Male	Members
Two kibbutz members	One hour	30 years	Male	Members
Site manager	One hour	20 years	Male	Member
Laboratory manager	One hour	7 years	Male	Outsider
Finance manager	One hour	12 years	Male	Member
Technician	Half hour	20 years	Male	Member
Technician	Half hour	15 years	Male	Member
Three-line workers	Half hour	Three month	Male and female	Outsiders

). The purpose of this kind of conversation was to create trust and understanding between researcher and participant. To start the flow of information, the researcher encouraged the participant to talk about his or her working conditions. Although the conversation was free and open, it had ethnographical elements such as obvious purpose, ethnographic explanations of the phenomenon under study, and ethnographic questions [78,79]. Each deep ethnographic interview—commonly used in qualitative research [78]—was dynamic, without a pre-defined structure, and the questions changed according to the interviewee’s position in the firm. This is different than standard interviews, regularly used in controlled experiments, and in which the researcher uses questionnaires with a predetermined structure and order. The open and unstructured interviews revealed important information about the enterprise’s business strategy, how it developed, and how the firm executed it over the years. In addition, the interviewees described how TI’s strategy integrated communal interests into its business strategy and how the communal narrative contributed to its business success.

The twenty-seven participants sat for interviews during 2017 and 2018. Although most of the interviewees held top or middle managerial positions (mostly of them are males, female positions are more in middle managerial positions), professional and production-line employees also participated in the study. In addition, a number of kibbutz members (i.e., non-employees) sat for interviews. This diversified group of interviewees offered various perspectives regarding the strategic business operations, given their different positions in the firm. Some participants provided data concerning previous development of the factory; while others, who had held different positions at the company, supplied a great deal of mutually verified information, thus presenting a consistent view of the enterprise.

(1) The top managers (the CEO, a former CEO, and the vice president) were all veteran kibbutz members, who had worked in various positions in the factory. They supplied knowledge about the firm’s external, internal, and communal strategy. These top managers shared their beliefs and vision about strategic management sustainability and how they initiated and implemented organizational learning in an innovative enterprise. They spoke about success and growth—as well as changes at the plant—following reorganization.

(2) The middle managers included a former marketing manager, a current marketing manager, a purchasing manager, a finance manager, an Israeli-site manager, a quality manager, a human resources (HR) manager, a former HR manager now active at the plant’s newsletter, a laboratory manager, a purchasing manager from another kibbutz industry that partners with TI on occasion, a salary manager, a housewares department manager, and a storage manager. All the middle managers were kibbutz members, with the exception of the quality manager, who was a hired employee from the outside. These administrators contributed data about the efforts of their departments to execute the firm’s business strategy.

(3) The professional workers included a bookkeeper, two veteran technicians, and a graphics department employee—all of whom were kibbutz members. In addition, there were two hired quality engineers and a hired employee from the development department. These professional workers provided information about the strategies of innovation and development of the product lines, as well as the communal strategy of the enterprise.

(4) The production-line workers included two temporary production-line workers (kibbutz members who completed their military service) and three outside production-line workers. These interviewees supplied information about the operation of the production lines.

(5) The two non-employee kibbutz members supplied information about the community and why it had rejected the process of privatization—which most kibbutzim had adopted.

3.1.2. Document Analysis

Document analysis complemented the organizational data from the interviews. TI summarized its activity in a booklet that celebrated its 60-year anniversary in 2010. The booklet reported on organizational events, the founding and history of the factory, and the future. This booklet supplied much information about the firm’s business strategy. It described the development of the strategy, the logic behind the strategies, the contracts with the new allies, the acquisitions over the years, and the other initiatives that TI’s management implemented. The booklet also featured interviews with the CEO at the time—which gave information how the firm would accomplish future plans. In addition, the booklet provided information about sales and the establishment of overseas branches.

A 2016 newsletter provided more information about cultural events and also offered management’s views about the firm’s business strategy for the future. This booklet also reported personnel changes—introducing the new managers and thanking retiring workers and managers for their contribution to the company. This source provided information about internal strategies that improved organizational performance.

These published documents included interviews with various managers in which they described their vision and how it molded business strategy in TI. In addition, the booklets published information about sales, strategies for growth and expansion, global achievements, acquisitions, innovations, and product development in previous years. Although the booklets presented the formal managerial viewpoint, they included the communal perspective of the managers. The interviews confirmed most of the data in the booklets and added a more informal perspective to that data.

3.1.3. Data Analysis

Glaserian and Straussian grounded theory guided the design of this research study [82,83]. After interviewing the organizational members, the researcher identified the three narratives (communal, internal and external) in the study. Documents from the organization complemented the interviews. The case-study method helped the author to achieve interpersonal reliability and verify the findings by triangulation: information from the interviewees validated information of other interviewees, further validated by the document analysis [82]. Unfortunately, external reliability was impossible to ascertain because the research—as a qualitative case study—had a near‒unique naturalistic essence, making it almost impossible to replicate the results. Because this problem of external validation was inherent in the case-study method, it limited the current research by making generalizations problematic [77,82]. To overcome this dilemma, it would be wise to examine future research about business strategies in other cooperative enterprises.

Grounded theory provided the process for analyzing sustainability strategies. Glaser and Strauss first developed grounded theory in the 1960s [82,83], Their aim was to provide a dynamic framework for the findings discovered during field research, to achieve a better accommodation for the empirical setting than in quantitative methods, and to close the gap between theory and the construction of reality [86,87]. Grounded theory supplies a better understanding and interpretation of complicated sociological phenomena; the researcher compares the data with the theory and tries to finds the connections to verify assumptions. Previously, research analysis proceeded from a theoretical model to the findings. This previous method was deductive and artificial, often not accommodating the findings of case studies, which followed qualitative methods [82,83]. The analytical process of the case-study method supports better theory by exploring the unique features of each case [73]. In this way, the researcher creates a simultaneous dialogue between data and theory, elaborating and changing that theory to accommodate the findings [82,83]. Grounded theory uses coding procedures of qualitative methods, whose level is more precise than quantitative methods, in order to distinguish accurately the sociological phenomenon.

The strategic business sustainability model that the current paper proposes may predict business strategies in other kibbutzim and other cooperative communities. In addition, the model will supply a better understanding of cooperative life and may predict managerial behavior in dynamic cooperative conditions. Grounded theory provides clear and useful tools to construct reality and connect that reality with relevant theory [83].

Categories of data emerged from TI fieldwork that formed narratives corresponding to the theories of business strategy and business sustainability strategy. The narrative of the environment of the marketplace has been fundamental in both bodies of literature [7,17,21,46,47,49,64,66]. The current study found various business strategies that helped TI to construct friendly environmental relationships, which constituted “external narratives”. Nevertheless, the literature has also emphasized strategies that stem from internal sources, such as social and economic initiatives that aim to improve organizational performance [10,11,12,13,14,24,50,54]. The current study classified these strategies as “the internal narrative”. Based on the literature, the researcher analyzed various organizational steps of the business strategy in TI that aimed to enhance its operations. Finally, the researcher connected theory to previous research on kibbutz industry [6,7,30,33]. Due to the paucity of literature concerning business strategies in kibbutzim [7], the current study called this “the communal narrative”. TI provided an adequate empirical setting for examining these theories. The interaction among the three narratives (the external narrative, the internal narrative, and the communal narrative) create the biography of the TI case study.

This study focused on the center of the TI network, the two Israeli factories adjacent to their owner-kibbutzim, thus mostly ignoring the non-kibbutz TI plants in Israel and its foreign factories, where the vast majority of the workers did not belong to the owner-communities. Rather, the research concentrated on the “headquarters” of TI, adjacent to the two owner-kibbutzim. The data analysis in this study was cumulative and inclusive. Each interview and document increased and clarified the overall impression. Topic analysis of the data allowed recursive sifting through the data and their distribution into relevant combinations, corresponding to the three key narratives [77,86]. Precise inductive juxtaposition of the data and relevant literature generated feasible causal interpretations of the TI phenomenon [73,87].

4. Findings

This section presents the business strategy of TI with three narratives—the communal narrative, the internal narrative, and the external narrative—and how each contributed to the firm’s business sustainability.

4.1. Brief History of TI and the Kibbutz T Community

Kibbutz T established TI in 1950 in order to provide jobs for older members and members with disabilities. At that time, it was a minor operation, making plastic items. After receiving its first roller press, the workshop began producing various household goods. With more presses, the production lines expanded to flight suits, lamps, and seats for toilets. In the 1960s, the plant adopted the technology of injection molding and began manufacturing military helmets and other products. The factory opened a new department in 1967 in order to make plastic wire for use in farming. In 1979, becoming partners with John Deere—a major producer of tractors and other farm equipment—was a significant step for TI. Another giant leap forward was the 1990 opening of overseas plants and offices, marketing filler-material for shipping farm produce and equipment. TI grew so successful that it earned first place among all kibbutz enterprises [88].

At the time of the research, TI had four Israel plants: the original one in Kibbutz T; one at Kibbutz G, which is a 25% partner in the enterprise; and two others—which TI set up in 2003—that are not adjacent to kibbutzim. Kibbutz members managed each of the two plants and hired employees from nearby cities. In total, TI employed 1400 people—about half locally and the other half overseas. Forty percent of TI’s workers in Israel are kibbutz members. The kibbutz members working abroad tended to be managers and technical experts. Thirty seven percent of the total workforce was between the ages of 18 and 30. Fifty-six percent was ages 31–60. Finally, 7% were 61 or over—including part-time kibbutz workers—who were officially retired [88].

Kibbutz T—which owns 75% of TI—has not gone through the process of privatization, despite the fact that most kibbutzim have done so. This fact probably reflected the extreme left-wing politics of the pioneers that established the kibbutz in 1922. At the time of the research, approximately 1200 people lived in Kibbutz T. About 47% of those residents were kibbutz members, and over 50% of all the residents were children. This community developed with a firm socialistic ideology. Despite the changes in the kibbutz movement, Kibbutz T has maintained its communal lifestyle [42].

4.2. Cooperative Features at TI

TI is situated in a non-privatized kibbutz and displays certain community-like attributes that affect managerial business strategy. First, its organizational structure tends to be flatter than those of conventional corporations. The present CEO referred to the TI hierarchy as “flat and soft”: If a manager assigns his employees a certain project, they are obligated to complete it, but the manager does not overemphasize his function as their superior. He noted that relationships are sound, even if status is unequal. An HR employee said that the overall atmosphere is free, without micromanagement. She explained that the manager cannot order his workers around, because they feel equal. This applies to hired employees as well as kibbutz members. A production line worker said that you can talk to managers about both professional and personal matters: “None of the managers at TI display a hard-nosed attitude towards their workers. We run the factory as kibbutz members. People who were not raised on a kibbutz could not understand this attitude.” A production line manager agreed: “Here, the hierarchy is flat. The CEO does not live in an ivory tower, but at the same time, the chain of command is clear. He (the CEO) assumes responsibility and authority. Equality is manifested in the teamwork that is customary at TI.”

Recently, teamwork underwent certain changes. A former HR manager said that TI teamwork has its origins in kibbutz socialist philosophy. Nevertheless, managers require more authority than other workers. She noted that TI has a clear chain of command, adding that the democratic process could impede or even entirely halt plant operation. Her observations reflect a change in collective ideals, claiming that egalitarian authority in teamwork can be deleterious to production. The team-working change was addressed by employees of other departments as well. For example, team meetings became less frequent in the laboratory department, dwindling down to monthly sessions. The lab manager calls for extraordinary meetings only when urgent issues arise.

TI employees share knowledge and ideas with other team members. Traditionally, information sharing took place on a formal and informal basis alike. Most participants said that open communication is common at TI, as information is presented and evaluated at workers’ meetings. One resource manager remarked: “It makes you feel essential to the plant,” while the current CEO added: “Communication channels are open, and managers are available to both kibbutz members and hired employees.”

These socialistic features [88] effected determined TI’s business strategy thereafter.

4.3. Communal Managerial Strategy of Cooperative Features at T Industries

4.3.1. Stability and Continuity

TI Management constructs its strategy for the long run. The managers want to ensure the existence of the factory for future generations of kibbutz members. This policy reflects the nature of this cooperative community, which maintains the classic kibbutz principle of the sacred nature of work. Members consider accepting money without work as immoral—a dishonest livelihood stemming from the exploitation of other workers. The CEO stated: “A lot of kibbutz sold off their businesses and divided money among to the members. We want to keep the business going.” The finance manager said that the T community had a strong commitment to its members. He said: “The factory is not for sale, we are devoted to our members, and we want to reassure them about their places of work.” Other interviewees also noted the commitment of the factory to supply a livelihood for kibbutz community members.

4.3.2. Preference for Kibbutz Members Rather Than Outsiders for Organizational Positions

The initial goal of most kibbutz industry was the creation of employment for the kibbutz members [42]. TI hires kibbutz members to provide them a livelihood. As kibbutz members, the managers view member-employees as part an extended family, not as simple employees [8]. The human resource manager said: “When we are recruiting workers for the factory our first concern is about our members. First, we look if we can find a suitable worker from our community, then we look for outsiders.” In recent years TI has been recruiting professional workers for the engineering, innovation, and quality-control departments. These workers need credentials to get the job. As a result, young members go to college and technical schools to obtain the required credentials, but if there is not enough of these young, trained members, TI recruits more from the outside.

TI is interested in kibbutz members, because they understand the cultural DNA of the kibbutz. As one of the marketing managers said: “It is better to hire a kibbutz member. He understands our needs better because he was raised in our community.” The TI strategy is to nurture competent workers and see them as potential future managers. Some managers—like the marketing managers and production managers—began in the production department and over the years progressed to higher positions. Nevertheless, this policy occasionally causes problems—especially when workers fail at their work. It is difficult to fire them, so the factory usually moves them to another department. This strategy has a lot of advantages, but the managers sometimes complain that kibbutz members are spoiled, and it is difficult to work with them. Some interviewees pointed to a few managers that prefer hired employees because they are more obedient and less opinionated than kibbutz members. Kibbutz members are more involved and want to influence what happens at work, but sometimes the management silences their voices. Some veteran technicians voiced criticism, saying: “There are top managers who take the opportunity to get rid of veteran workers, who are more involved and are not satisfied with the personnel changes.” Nevertheless, these veteran technicians concede that the outside employees are more obedient, do not ask for explanations, and are easier to work with.

4.4. Suppling Work for Kibbutz Members as a Social Responsibility

In the past, kibbutz members could work without retirement. However, in recent years many kibbutz industries have changed this norm, forcing older workers to retire for the sake of efficiency [30,33]. The TI management has maintained the previous norm because of the concern for the psychological wellbeing of older members and created a special department to give them meaningful work, making plastic houseware. The Manager of this department monitors the health of the workers. She said: “If a worker is absent, the manager calls the worker and behaves like a social worker”. This department has 25 workers [8].

Young people are another group that TI looks out for. Despite the marginal value of their work, the factory hires the kibbutz’s young people before they go off to the army, right after their military service, if they are saving up money for a post-army trip abroad, or if they are “between jobs”. The managers feel a responsibility for the wellbeing of these young people, because they are members of the community. The production manager stated: “These young workers are not very beneficial to the factory, but we think that maybe in the future they will work in the factory”.

4.5. Internal Factors: Production Planning

In 2015, TI management decided to change the focus of productions lines and produce more plastic wires. This made it the firm’s third key production line. The first key line was the hay nets and the second was the covers for cotton. This strategic decision resulted in the increased production and marketing of plastic wires. It also impacted the innovation unit, which invested greater time and effort into improving the wires, making them stronger and longer [3,4].

4.5.1. New Product Manufacturing

Top managers had already set this objective in 1957. The chief storage manager explained: “We are constantly seeking and developing new products and ideas.” A former internal manager informed us: “In 1968 and thereafter, managerial strategy called for expanding the factory’s product line. We began by producing plastic lamps, then helmets for the Israel Defense Forces (IDF) and plastic garden ornaments. Once, we also made an egg collector for chicken coops, but it did not sell well, so we halted production.” He mentioned several new products: “During the 1970s, we brought in machines to produce plastic wires. Subsequently, the company began manufacturing plastic sheets and sacks. Later, it shifted to light crocheted nets that were beneficial in the production of vast packing surfaces, as well as circular hay and straw nets. In 1979, managerial strategy called for progressing from one product line and one manufacturing department to multiple items and departments” [88].

The current CEO was unequivocal in describing the means of achieving the dual objective of seeking new opportunities and exploring new markets: “The company acquired two large presses and began producing melamine toilet seats. Workers learned to use plastic tablets and instituted a line of pot handles, military products for the IDF, and plastic items for El Al Israel Airlines” [89].

4.5.2. Constant Improvement, Excellence, and Innovation

One of the elements of organizational strategy is reflection and learning from mistakes. A business must have a learning process, in which members of the organization discuss and analyze every failure in order to understand how to improve the products. As one of the top TI managers stated: “We try again and again till we are satisfied from the result. Our ethical code is: ‘never say enough’, constantly improve yourself. Once we had a crisis about the strength of the wires. Quality workers got involved in the process. They were making a huge effort to deal with failure in Israel and also abroad.” The CEO said that TI was committed to the highest quality standards: “We want to lead with our products, to manufacture them inexpensively, but with high quality. This can explain our success. If we fail, we don’t give up till we get good results! We also look for special products that the customers request. Our excellence is accomplished by a strategy of anticipation of what is new in the market.”

TI opened a department of innovation in 2011. The department consisted of engineers and other qualified creative people. Most of the innovation dealt with plastic items for agriculture, primarily regarding packing hay and cotton. In 2015, a top managerial discussion about innovation further clarified the innovative process: The implementation of each innovation would be the result of thorough research and testing. After 2015, TI developed new products from melamine for use in hospitals and nursing homes, as well as plastic products for supermarkets (e.g., trays, plastic boxes for storage, and cups for pubs). The factory also invented new products for agricultural use like paper rolls, improved hay nets, packages for cotton, and packages of hay nets, which it tested in extreme temperatures in Australia. The marketing manager stated that the factory had invested a great amount of time, effort, and technology in developing stronger wires, with a goal of making them the best in the market. The new wires were longer and stronger, obtaining the approval of official German quality standards [88].

In addition, the factory received patents for covers for hay and cotton. Because innovation has been one of the fundamental defining elements of TI, the innovation department has been a very important unit, supporting the work of other departments in the factory.

4.5.3. Organizational Learning

Professionalism strategy is reflected in the internal process of socialization through which TI trained its managers to become more qualified for their positions. As the Israeli site manager noted: “When nominating a new manager, the factory usually trains kibbutz workers, starting at the bottom. Look at all the CEOs. They advanced slowly and gradually to their current positions.” Plant managers progress slowly by gaining experience with all kinds of assignments. Over the years, they improve their knowledge and managerial skills as well. However, a successful management demands professional personnel.

To achieve high professionalism, T managerial strategy called for universal in-service training, as well as external higher education. Assimilating new technologies demanded training programs; factory employees learned extrusion techniques and bought two machines. During 1998 and 1999, TI initiated study programs for kibbutz members to acquire the engineering and technical skills required for the factory’s development [67,88]. Some participants described their study programs. When they were first hired, the plant sent them to the Technion. Most studied engineering. An HR resource manager confirmed that TI sent some of its kibbutz workers to very expensive B.A. and M.A. degree programs for the benefit of the factory and its employees alike.

Operations department employees receive training and guidance as well. The manager of this department informed us that he is active in several departments, such as crocheting, extrusion, cotton coverings, and assistance. Workers participate in day-long training sessions and take examinations in the material studied before they can progress to the next stage. The manager indicated: “My aim is to improve the employees’ level of professionalism.” The manager also set up an internet site on which workers can find information. The problem is that all the information is from overseas and written in English, although translators are available to help local personnel study the material [88].

An human resource department employee said that TI has a training coordinator in charge of training and preparing workers for their new jobs by drawing up special programs responding to organizational needs: “We have several programs: professional education, managerial development, and team development. We want workers to acquire professional skills, assimilate a culture of learning, and internalize TI organizational culture as well. If some workers need Excel training, we find a special instructor for this purpose.”

4.5.4. Growth and Expansion

From the outset, TI considered the growth and expansion an existential company needs, as the current CEO remarked: “TI must grow and develop. The company cannot simply remain stagnant.” He added: Significant growth is taking place in cotton envelope packing, but not regarding other products. We must address this matter at once. From the owners’ point of view, we need to disperse risk and in the long run perhaps also find a new agriculturally related manufacturing target. As CEO, I will do all I can to promote this vision.” The strategy described is reflected in constant growth of T Group sales: $17 million in 1991, increasing by 15–20% annually to reach $220 million in 2009 and $500 million in 2018. The profit in 2015 grew by 60%, and business strategy is intended to extend by more than 10% during 2016. Sales were extended to 600 million dollars, 100 million more than last year. The sales increased 15% during 2015 [89].

4.5.5. Structural Design Change

In 1991, TI declared that its strategy should be oriented towards market expansion and exports. Top management decided that the organizational structure should accommodate this process commercially by engaging an HR manager and stipulating planning, control, and reporting procedures. During 1966 and 1967, the factory set up a new department to manufacture plastic wires; a plastic helmet department, established in 1968, continued operation until 1989; the egg collector mentioned above was produced by its own department from 1983 to 1998 [88].

In 1985, TI opened a Quality Assurance (QA) department to ensure quality conforming with international standards and review manufacturing processes in all departments (T Industries 2010, 68). The HR department, which commenced operation in 1991, offered supporting services for improving TI employee wellbeing, providing training programs, and recruiting new workers. TI opened a new R&D department in 1995 [73]. In 1995, it added an acquisitions department that was divided into local, international, and technical acquisitions sub-departments [88].

In 2002, TI opened two new departments:

(1)

The engineering production department for coordination and control of new product manufacture, authorization of production methods in all T branches, and monitoring and reducing production costs.

(2)

The production planning and control department for accepting customer demands and producing production orders accordingly, and adapting products to environmental changes [89].

That same year, following lengthy strategic discussions, the company decided to open another production site. In 2003, a site was launched at the second, partnered kibbutz, joining the five production sites already in operation at various locations. Maintenance of multiple sites demanded standardization of manufacturing control and quality parameters [89].

In 2006, an information systems department was set up to provide and service computers, peripheral equipment, and software for all TI departments (T Industries 2010, 80). In 2011, TI opened an innovation department [88].

4.5.6. Changes in Managerial Positions

A major HR re-organization occurred in 2015. The goal of this strategy decision was to refresh the organizational system by hiring and promoting educated and qualified kibbutz members for senior positions. Top managers replaced the treasurer, who was the manager of the finance department. Management appointed the previous manager of the applications department to the information systems department at the same time as replacing other managers in that department. This brought in a new applications manager (this department is installing applications to cellular phones and also organizational applications for workers and customers). The infrastructure department also received a new manager [88].

4.6. External Environmental Factors

4.6.1. Partnership Relationship

TI went into partnership with another kibbutz the early days of the enterprise, primarily to find more kibbutz members to work in the plant. Prior to the early 1950s, kibbutzim strived to exist on “self-labor” and not exploit non-member workers. With the flood of immigration in the early 1950s, the government pressured kibbutzim to build labor-intensive factories to employ these immigrants, who had few other sources of income. Nevertheless, the internal coordinator decided that TI would only hire workers from other kibbutzim. This instruction led to an important decision to merge with another kibbutz that would supply the required personnel. The agreement was formulated on 31 December 1969 after having been discussed by the economics committee and approved by 15 of its 16 members (one dissenting vote). Committee members recommended a one-year trial period—a decision authorized by all kibbutz members. The partnership was signed by mutual agreement on 15 January 1971. Plant ownership was divided as follows: Kibbutz T—75%; other kibbutz—25%.

Another example is the successful partnership with major tractor manufacturer John Deere. It began in 1987, when TI was asked to send John Deere an offer for supply of 5000 cylindrical packaging units for hay. In 1988, TI representatives conducted an extended meeting with John Deere engineers, following which an agreement was drafted between the two companies: TI later signed a three-way agreement with John Deere and its distributor, naming TI as the exclusive supplier of hay nets for the USA and later for other locations throughout the world. This agreement accorded TI a major advantage over its competitors in the market, such as Novatex and Polidres [88].

One former CEO said: “TI’s greatest success is its partnership with John Deere. For example, TI produces cotton envelope packing from plastic bags. TI markets superior nets and has an excellent reputation because of its product quality. It controls over 50% of the market—a most extraordinary phenomenon. TI has competition, but its technology is superior. We also devised handles for cotton packing. TI’s agreement with John Deere succeeded in reducing waiting time for products without sacrificing quality. Furthermore, our agreement calls for mutual development of a unique press roller with no cotton loss because the envelope packs the net from both sides. John Deere developed a special cotton packing system that keeps the cotton dry and fresh, according TI an advantage over competitors that still use more primitive methods requiring numerous workers. Our partnership with John Deere saves on manpower and working hours, giving us a virtual monopoly in the cotton packing market.”

4.6.2. Alliances with Other Organizations

This strategy includes partnership with other firms, as well as mergers with and acquisitions of Israeli and foreign companies. The ability to combine activity with that of other firms was found to be essential, even during the 1950s when TI was first established. The production manager recalled: “TI acquired two patents for plastic manufacturing: One from Rotaflex (a British concern) for plastic lamps and bags and another from a Swiss company for decorative housewares.”

Alliance strategy affected the development of the factory, which metamorphosed from a small workshop to a giant global firm with branches worldwide. The current CEO stated: “When I began working at TI in 2000, there were only two kibbutz factories. In 2003, I was a partner in the establishment of the first plant in an urban area. The factory has a lot of marketing companies that we bought or with which we merged. We advised the operation and marketing departments.”

4.6.3. Going Global

Even in the initial days of TI’s growth, top management recognized the importance of expanding overseas and how it would further the firm’s success. Nevertheless, the first attempts to expand overseas occurred in 1990, when an American dealer for Solkoor started selling TI’s goods. Eventually, TI purchased this dealership and sent a manager from TI to operate the business [88]. In 1995, TI set up a branch in the United Kingdom to market its products in Europe. In 1999, a number of branches opened in Italy. In 2000, the enterprise bought out Novatech in Germany. TI started selling its goods in France in 2005 and in Sweden in 2007. In 2007, TI bought out a pre-existing marketing company in Ireland and a similar company in Canada [89]. In 2009, TI’s marketing network extended to Poland and Hungary [88]. In 2015, TI acquired several factories in Europe, in Austria, Hungary, Poland, France, and Brazil [89].

Reflecting on the firm’s international nature, the Israeli site manager stressed that the enterprise strived to maintain its cooperative roots while appreciating local practices: “While operating in Vietnam, one learns how to integrate the two worldviews. In our overseas branches, local businesspeople administer the production operations as well as the marketing. These people understand the local system. We strive to harmonize our socialist concepts and the existing capitalist marketplaces. Despite the desire to maximize profits, we try not to exploit our workers and clients.”

TI’s international growth developed beyond distribution and marketing of Israeli–made goods using local dealerships:

(1)

Acquisitions: In 2015, TI acquired several factories in Europe, in Austria, Hungary, Poland, France, and Brazil. The enterprise acquired Ambresco in the United States. These factories produced hay nets, plastic rollers, garments, and other TI products. The new acquisitions increased the sales; rollers grew by 5% and total sales increased by 2% On the other hand, TI closed its factory in the United Kingdom [88].

(2)

Opening the Regional Technical Management (RTM) office: TI opened this department in 1996 in Europe to support the enterprise’s marketing companies all over the continent. The department forms close ties with the customers in the field and explains the benefits and maximum profits that customers can achieve with the various products. If there are complaints or technical problems—particularly with the wires and rollers—these customers can get guidance from the department. Members of RTM also teach the local marketing staff about technical information [89].

4.7. Summary of Strategic Management

A summary of TI long-term profit maximization strategy was drafted in 2009, indicating that the T Group strives for outstanding innovation, a strong presence in global markets, and sound connections with manufacturers of agricultural equipment. The strategic plan also mapped out the principal T Group clientele: private or cooperative agricultural equipment distributors and dealers, with agricultural work contractors and farmers considered as well. The chief products to be manufactured are used for producing packing: round module wrap, surface nets, wires and ropes, and shadow nets [89]. This business strategy was announced by the current CEO in an interview this year (2018): “The success of T Industries stems from business focus, decisions and strategy. It began when we identified the hay net project that we are carrying out in cooperation with John Deere, constituting our principal route to growth and success. To achieve our aims, we put a lot of effort into invention of new products with new technologies, as well as a sound, compatible and effective business system that our competitors cannot match.” His statement summarized the strategic model that was implemented over the years, covering growth and development, manufacture of new products, change in organizational design, global marketing aspirations, innovation, professionalism, and strategic alliances with other firms. The following list summarizes in

Table 2. The Strategic Management Model of TI.

Communal Factors	Internal Factors	External Factors
Stability and continuity	Production and planning	Partnerships
Hiring kibbutz members rather than outsiders for organizational positions	Manufacturing new products	Alliances with other organizations
Suppling work for kibbutz members as a social responsibility	Constant improvement, excellence, and innovation	Acquisitions
	Organizational learning	Going global
	Growth and expansion
	Structural design change
	Changes in managerial positions

:

Figure 1 summarizes the business strategy.

5. Discussion

This study analyzes the strategy of business sustainability in a non-privatized kibbutz community. The success of the TI business strategy stems from its managerial ability to adjust to competitive environments [64,66,69] through constant improvement, innovation, and creative thinking [22,23,24,49,52]. TI has become a learning organization that assimilates new technologies and adopts high quality standards. The management has been capable of correcting mistakes through self-criticism and constant improvement. This explains the firm’s excellence in commercial achievement [13,14,17,18,19]. To date, the literature has not adequately discussed the role of the internal self-criticism mechanism that originates in the kibbutz cooperative tradition. TI managers grew up with democratic and egalitarian cultural beliefs—socialist values that rendered them more amenable to criticism. This study notes the contribution of socialist tradition in guiding the TI business strategy in a communal direction through development of a sustainable business strategy [7,8].

The present study analyzes the managers’ ambition to become global players and the transformation of these ambitions into an operational procedure [69,71]. The article describes gradual operational and structural evolution and growth, serving the business goal of becoming an extensive and successful global enterprise [46,64]. TI has built a global business system that has acquired overseas alliances, assets, and companies. Managerial activity has achieved this globalization and growth through constant organizational development in Israel and abroad. New departments have been added, affording the firm a substantial competitive advantage [50,51]. Top TI managers know how to take advantage of global opportunities with calculated risks [13,17] and to produce rational, detailed plans. This business strategy has ensured TI sustainability.

TI business strategy comprises three components. Figure 1 presents the visualization of their interaction. The explanation of the three components and their interaction is a groundbreaking quality of this case study:

(1)

Cooperative communal factors stemming from socialist tradition

(2)

Internal factors consisting of components of organizational culture

(3)

External factors triggering environmental adjustment to global competitiveness

This case study demonstrates a sophisticated strategy that mediates the internal tension between capitalist competitive market realities and socialist traditions, which prior literature has not sufficiently discussed. The firm’s business strategy strives to balance competing forces: the concern for the collective wellbeing of the entire kibbutz community and TI’s interests to operate autonomously without communal constraints. Given the labor market, managerial policy requires hiring more managers, professional workers, and production-line workers from the outside. Nevertheless, communal considerations about the wellbeing of kibbutz members can cause management to hire and retain unqualified member–workers. The drive for efficiency has decreased the open communication among employees that had been more customary in the firm’s cooperative history. The previous flat egalitarian organizational structure has become more hierarchical and bureaucratic, as the communal factor has become less significant in strategic considerations [30]. Nevertheless, the management’s growing capitalist drive towards maximum profits has directly benefited the kibbutz’s ability to thrive and maintain its internal socialist structure.

TI strategy can instruct its process: the management has committed itself to high quality standards [48], constant improvement, development of new products, and the nurturing of creativity and innovation [22,23,49,50,51,52,53,54]. The ethos of excellence has become fundamental in TI’s business sustainability strategy, expressing itself in constant organizational learning, organizational change, and rapid response to environmental challenges in its international niche in the agriculture equipment market [17,22,25,46,49,54]. TI managers knew to adjust to new opportunities by utilizing numerous environmental strategies [55]: ownership–partnerships, alliances with other organizations, going global, acquisitions, and opening a regional technical service center [24,25,68]. A key business strategy was transforming the firm’s internal capacities as a learning organization to an external service of advising and training global customers [10,11,12,15,16]. The communal aspects motivated top management to adopt a social responsibility. The firm tries to avoid exploitation of its employees and its clients. Most importantly, the profits of the enterprise enable the kibbutz to thrive as a socialist community and its members to enjoy a high standard of living [7,8]. Although some veteran workers have criticized the abandonment of communal management of the firm and its more professional and business style, most kibbutz workers have been satisfied with the outcomes of the business sustainability strategy.

Until now, literature has examined business model strategy in terms of achievement and organizational success [46,50,64], method and style of communications [68], quality of internal learning systems, innovation, and improvements [10,13,15,16,21,22,23,24,49,50]. There has been a dearth of literature focusing on conflicting strategies of management that stem from different underlying values. These studies begin to fill this void by examining a firm that strives for high profits and productivity at the same time as ensuring the wellbeing of the community of its owners. This dichotomy of goals stems from the Kibbutz industry tradition of operating with an egalitarian and democratic managerial style, maintaining close and informal relationships among managers and workers [62]. Although this cooperative management style has weakened at TI in recent years, managers still respond to a feeling of communal responsibility, incorporating it into the firm’s developing organizational strategies.

Most research about business sustainability strategy has concerned itself with the material perspective and creating suitable ecological conditions [20,51,58,63]. There has been a paucity of literature about organizational innovation and creativity in kibbutz business strategy. Breaking from that trend, this case study informs us of the importance of cultural and collective aspects that contribute to strengthening business sustainability, by adopting the values of constant improvement, self-criticism, improvement, creativity, and functioning as a learning organization.

This study is innovative because it points to the communal narrative as an important factor that can help ensure business sustainability strategy. Previous research about kibbutz industry posits that factories in cooperative kibbutzim, as opposed to privatized kibbutzim, have familial characteristics [8]. This can explain the special atmosphere and culture in these factories in general and in TI specifically. The current study presents a close and informal relationship between workers and management, because the structure of the factory is fairly egalitarian and flat. Kibbutz socialist ethos exists as the background in this case study. Thus, the kibbutz enterprise is responsible for members’ livelihood and lifestyle [70,72,73]. Obviously, top management devotes itself to organizational revenue and success, but the cultural factors operate behind the scenes, acting as incentives and motivating managers to achieve high standards in innovation, communication, and information systems [10,11,12,15,16]. The communal ethos shapes business sustainability strategic and dominates the strategies of the firm’s internal and external narratives.

The ability of the management of TI to mediate between conflicting demands can illuminate this case study. Familial and informal relationships minimize social distance and hierarchical borderlines between managers and their employees. Workers feel relatively secure, because management has difficulties in firing workers in cooperative industries. Nevertheless, the managers ultimately set the goals and procedures for the firm [8]. This atmosphere produces trust, solidarity, and high motivation among organizational members [32]. Another conflicting set of demands comes from external competitive capitalist environments that require high quality standards, punctuality, and various strict bureaucratic demands. These external demands are contrary to the familial relationships in the factory [13,17,18,19,20,21,52,61,63,64]. Successfully meeting these challenges—containing conflicting socialist and capitalist principles—demonstrates how the managers at TI have forged a creative business strategy whose goal is the sustainability of the enterprise for the long run.

6. Conclusions

The current research points out the importance of the communal narrative in a cooperative kibbutz enterprise that drives its business sustainability strategy. The strategic managerial operations respond to internal, external, and cooperative narratives. This case study also explains how TI’s business sustainability strategy stems from values of communal wellbeing [7], a phenomenon largely overlooked in business literature. In addition, the study emphasizes the role of the egalitarian tradition that incorporates self-criticism into business strategy as an incentive for organizational excellence.

Top management’s ability to constantly implement creative solutions explains how it copes with internal diversity. Only outstanding achievements can silence veteran kibbutz members’ criticism of the capitalist strategy and earns TI the highest revenue among kibbutz industries. TI’s considerable profits guarantee a high standard of living for community members, who enjoy large bonuses and therefore tend to ignore the partial abandonment of socialist managerial strategies.

This research found that contradictory demands on management can be powerful motivation to formulate a creative business strategy. The management knows how to mediate between opposing forces by creating a business strategy that includes communal benefits and economic incentives. In the case of TI, a heterogeneous business strategy that creates a variety of initiatives has been successful in coping with dynamic and unpredictable environments, achieving business sustainability.

This study contributes to the literature about business sustainability strategy by widening the variety of managerial steps, as well as pointing to numerous internal and external strategies [55] that can lead to openness and creativity among managers. Given the dearth of managerial literature about mechanisms of self-criticism, it is noteworthy that this is a fundamental norm in TI. This managerial behavior points to the commitment to excellence and outstanding achievement [21,22,23,24]. Thus, the current research enriches organizational literature about cooperative management by supplying vivid findings from the field. This case study also contributes knowledge to the literature of organizational development and change by presenting an example of a learning organization that actuates its new knowledge. In addition, the research is relevant to the theories of organizational design, describing how TI’s managerial strategy prevents its decline and stagnation.

This case study sheds light on cooperative business—a subject that has suffered relative neglect in the literature until now [7,39]. The current research enlarges managerial and organizational literature with additional knowledge about the ethical codes and cognitive processes underlying cooperative managerial strategy [7,8,10,17,52]. At the same time, this study implies some interesting questions: If the communal narrative is so essential in business sustainability strategy for cooperative kibbutz enterprises, is it relevant for urban businesses, and how can they assimilate this feature into their strategy? Is social responsibility a policy that urban businesses consider—as a communal narrative—in their organizational strategy [70,72,73]? Finally, does social responsibility have a similar effect as a communal narrative as it has in kibbutz industry?

However, this case study presented only one example of business sustainability strategy. To overcome limitation of the research, it would be wise to examine the business strategies of various other kibbutz enterprises.

6.1. Practical Implementation

The current research suggests the following points for practical implementation:

• Business strategy should take community wellbeing into account. This is true for purely
• capitalist ventures as well as cooperative businesses.
• Community responsibility can improve operational behavior, internally and externally.
• Long–range strategy increases worker commitment and security.
• Values of open communication and self-criticism improve performance.
• Integration of diverse socialist beliefs and capitalist operations in a sustainable business
• strategy can encourages innovation, creativity, and success.
• Informal relationships, team work, and open information can improve organizational behavior
• by achieving greater commitment, solidarity, and excellence among and organizational members.
• Assimilation of knowledge arising from constant learning procedures will improve operational management of staff and production workers.
• Constant organizational improvement—as was presented in the TI example—can motivate
• dynamism and growth in the organization—preventing stagnation and decline.

6.2. Suggestions for Future Research

Future research could focus on cooperative industries—as in the case of TI—and also privatized firms. Research questions would focus on their business strategies: Are their business strategies similar to TI’s strategy, or do they contain other narratives? Do their business strategies supply sustainability to the industry and the kibbutz community? Another research project could examine business strategies of private enterprises in order to compare and contrast those strategies in cooperative communities and private enterprises in Israel and beyond. One research question could be: Do non-kibbutz business strategies involve a communal narrative? How do these enterprises ensure their sustainability in their strategic policies?

This future research would contribute to theory by pointing to the various factors involved in business sustainability strategy. It could also supply practical implications for managers: how to design appropriate business sustainability strategies that consider the conditions in which each business operates.